1. We are of opinion that this appeal must be allowed, and the order of the District Judge refusing to declare Jowalla Nath, the judgment-debtor, an insolvent must be set aside.
2. It appears that the judgment-debtor applied on the 26th of January last to be declared an insolvent; and the 28th of March was fixed for the hearing directed by Section 350 of the Code of Civil Procedure. That hearing took place, and the District Judge has refused the judgment-debtor's application on the ground that for two years he has taken no steps to realize the property set out in the schedule of assets and to make it available for the payment of the debt due by him to his creditors; and the Judge says he thinks that the applicant is not a man to whom any favour should be shown, and he points out that the amount of assets is Rs. 1,000 in excess of the liabilities.
3. Now the Judge was not asked to show any favour to the applicant at all. He was asked to proceed according to law, and he was bound so to proceed. He could not refuse to declare the applicant an insolvent unless he found affirmatively that the applicant had brought himself within what I may call the penal clauses of Section 351, The Judge has not found that. He was, therefore, bound to declare him an insolvent.
4. It is quite an error to suppose that a man is not entitled to be declared an insolvent because the sum total of his assets is larger than the sum total of his debts. It may well be, and is frequently the case, that a man's securities are looked up and are not available at the time he is called upon to pay his debts, but he is none the less entitled to be declared an insolvent, unless he is found guilty of dishonest conduct. The practice of leaving a man to the mercy of his creditors, who, with a view of extracting money from him, gets him locked up in jail after he has voluntarily placed the whole of his property at the disposal of his creditors, is, in my judgment, a practice which cannot be too strongly reprehended. A man is entitled to the benefit of these sections of the Code in the mofussil just as an insolvent in a Presidency town is entitled to the benefit of the Act for the relief of insolvent debtors. These sections do not relate to matters of procedure. They are intended for the relief of insolvent debtors in the mofussil, and must be so applied.
5. The order of the lower Court must be set aside, and the District Judge directed to declare the petitioner an insolvent, and appoint a Receiver of the property disclosed in the Schedule.
6. We shall make no order as to costs.